Treasury Secretary Henry Paulson is defending a plan brokered by the Bush administration to “freeze” mortgage rates for some subprime borrowers. By coordinating an alliance of lenders, servicers and investors, the Administration is hoping to prevent avoidable foreclosures.

Critics of the plan fall say that the rate-freeze plan is a start, but it’s a late one and not sufficient to address the size of the problem. Others point-out that adjusting mortgage contracts amounts to a bailout. That is, free-market principles say that those to take on risk should suffer the loss when bets go bad.

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